Greene King toasts to record trading on Christmas Day as third-quarter sales increase

Pub operator Greene King said on 10 February that record trading on Christmas Day helped it post a growth in sales over the festive period as well as in the 40-week period up to 7 February.

The FTSE 250 group said like-for-like sales at its Greene King business rose 2.2% year-on-year in the 40 weeks, while like-for-like sales from the Spirit-managed estate climbed 1.1%. In the two weeks over Christmas, meanwhile, Greene King like-for-like sales increased 5.0% from the corresponding period in the previous year, while Spirit like-for-likes rose 5.2%.

Christmas Day proved to be particularly cheerful for the company, which achieved record sales of £6.8m ($9.8m, €8.7m) on the day in the combined Retail estate on the back of strong food sales, while the group posted a sharp increase in drinks sale on New Year's Eve.

Meanwhile, the Pub Partners business, which include tenanted, franchised and leased pubs, saw its like-for-like net income rise 2.5% in the 40-week period, while the Brewing & Brands division's own-brewed volume increased 3.9%, thanks to strong sales of Greene King IPA and Old Speckled Hen.

Numis' analyst Douglas Jack described the results as positives and upgraded his profit before tax forecasts for 2016 by 1% to £254m, slightly above consensus for £246m.

"With the dividend now yielding 4%, we reiterate our 'add' recommendation," he said.

Earlier this month, the latest statistics from the Campaign for Real Ale showed that by the end of 2015, the number of pubs in the UK was at its lowest for a decade, as 52,750 public houses were in business at the end of year, with an average of 27 closing every week for the second half of 2015.

However, despite the challenging industry environment, Greene King remained upbeat over its outlook. "Overall, our expectations for the full year are unchanged," the company said in a statement.

"Despite the current global economic uncertainty, we remain confident that we will deliver further value to our guests and shareholders by continuing to develop and enhance the existing Greene King business while successfully integrating Spirit."